The onset of prostate morphogenesis is involved in the interaction between mesenchyme and epithelium. Proprotein convertases (PCs) activate a variety of growth and differentiation factors including mesenchymal and epithelial factors, such as insulin-like growth factor (IGF) and transforming growth factor-beta (TGF-beta), which induce ductal budding and branching. In this study, we provide evidence that PCs play a critical role in prostatic budding from the urogenital sinus (UGS) and ductal branching morphogenesis of the neonatal rat ventral prostate. PCs were expressed only in the epithelial cells of neonatal rat prostate. PC activity in the ventral prostate was modulated by endogenous androgen. PC inhibition suppressed prostatic budding and branching. Taken together, our data indicates that androgen-induced PCs initiate the development of the prostate.